In a decision handed down on 27 March 2019 (file no. 27 Cdo 3885/2017), the Czech Supreme Court considered the statutory formalities to be met when sending an invitation to a joint stock company’s general meeting. The court looked especially at the justifications to be given when proposing a resolution for adoption at the meeting.
According to the court, after reading the justification for the proposed resolution, shareholders should – without investing an unreasonable amount of time or effort – clearly understand (i) why the board proposes that the general meeting decide on the issue and (ii) why the approach proposed in the invitation has been chosen.
The court noted that the mere fact that a class of matters falls within the scope of the general meeting’s powers should not be considered sufficient justification. The same applies to references to vast documents of a general nature from which shareholders could not obtain the information required without investing excessive time and effort.